Report: Connecticut Has Largest Income Gap Between Top 1 Percent And The Other 99 Percent

Connecticut has the largest income gap between the top 1 percent of taxpayers and the bottom 99 percent, according to a recent study.

Connecticut's top 1 percent each earned an average of $2.7 million, compared to an average of $52,000 for the rest of the taxpayers -- a ratio of about 51 to 1, according to a Jan. 26 report from the Economic Analysis and Research Network.

The Economic Analysis and Research Network (EARN) is a network of state and regional multi-issue research, policy, and advocacy organizations coordinated by the Economic Policy Institute, a Washington, D.C. think-tank that takes a liberal view on economic issues.

New York had the second-highest ratio between the top 1 percent and the rest of the taxpayers -- reflecting "in part the relative concentration of the financial sector in the greater New York City metropolitan area," the report states.

It's likely that Wyoming, where the average income of the top 1 percent was more than $5 million, would take the top spot in the ratio rankings, but the bottom 99 percent couldn't be estimated, the report states.

Wyoming has a small and largely rural population, but its highest earners are in the oil, gas and minerals extraction industries.

The top 1 percent of taxpayers in Connecticut earn more than $677,608 — the highest 1-percent income threshold in the country.

The income threshold to be in the top 0.01 percent in Connecticut — the richest of the rich — is $83,891,599. That’s second in the country to Wyoming, where the threshold to be in the top 0.01 percent, a very small handful of taxpayers, is nearly $369 million, according to the report.

The study also looked at how income growth has changed since 2009 and concluded that "income growth has been lopsided since the recovery began, with the top 1 percent capturing an alarming share of economic growth. Over this period, the average income of the bottom 99 percent in the United States actually fell (by 0.4 percent). In contrast, the average income of the top 1 percent climbed 36.8 percent. In sum, only the top 1 percent gained as the economy recovered."

In Connecticut, the top 1 percent saw incomes grow by 35 percent between 2009 and 2012. That ranks 20th, near the middle of the nation. Wyoming saw top incomes grow by 283.6 percent; North Dakota, 103.6 percent.

The bottom 99 percent of Connecticut taxpayers saw average real income growth decline by 5.4 percent between 2009 and 2012, the report states.

Only in West Virginia — one of the poorest states in the nation — did the incomes of the bottom 99 percent rise as the incomes of the top 1 percent fell.

Looking back even farther, the study found that Connecticut’s top 1 percent grew by more than 414 percent from 1979 to 2007, the highest rate in the country. That top 1 percent captured 63.9 percent of all income growth in Connecticut between 1979 and 2007 — the eighth-highest in the nation.

“This rise in income inequality represents a sharp reversal of the patterns of income growth that prevailed in the half century following the beginning of the Great Depression,” the report states. “The share of income held by the top 1 percent declined in every state but one between 1928 and 1979.”